TMI Blog2010 (7) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (Assessment Year: 1990-91) 2 already granted from the tax refund to the assessee and computed the interest at the remaining amount. 3. The assessee was aggrieved by the method of calculation of interest on the refund u/s 244A. The main grievance of the assessee was that the interest u/s 244A has to be calculated on the tax refund without reducing the interest granted earlier on refund. The assessee filed a rectification application u/s 154 wherein inter alia raised this issue of calculation of interest on the tax refund by reducing the refund tax and not interest already granted. The assessee submitted before the AO that the interest part already granted should not be reduced from the tax refund due and interest would be paid on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,171/- being calculated by the AO. He has also referred the order of the CIT(A) and submitted that the CIT(A) has decided the issue only on the ground that the method adopted by the AO is being consistently followed in respect of all assessee s cases. Therefore, the CIT(A) without giving any reason and analyzing the issue is decided the issue has only on the ground that the AO is consistently following this method. He has contended that the CIT(A) has not gone into the correctness of the method adopted by the AO but has ITA No. 5136/Mum/2009 (Assessment Year: 1990-91) 4 considered the consistent method adopted by the AO. The assessee also filed a copy of the details of working of interest on refund filed before the CIT(A) in support of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, we are of the view that the method adopted by the AO suffered from grave error as the same has resulted the reduction of interest payable to the assessee because the principal amount is reduced by interest component already granted and then future interest is computed. The interest already granted up to a date is relevant only for exclusion of period for which it is granted and the future interest has to be granted from the subsequent period. Therefore, the interest already granted cannot reduce the principle refund due to the assessee but the amount which represents the tax already refunded has to be reduced from the total refund doe to the assessee for computation of interest u/s 244A. We note that the CIT(A) has decided the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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